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Fed Official Suggests Allowing Staff to Hold Crypto for Hands-On Understanding
Federal Reserve Vice Chair for Supervision Michelle Bowman has suggested that the central bank should allow its staff to hold small amounts of cryptocurrency to gain hands-on understanding of the technology.
Speaking at a blockchain event in Wyoming, Bowman emphasized that practical experience is crucial as the Fed prepares to develop a supervisory framework for digital asset issuers.
“There’s no replacement for experimenting and understanding how ownership and transfer processes work,” Bowman said.
Current Restrictions Limit Crypto Exposure
Under current rules, most Fed employees and their spouses are prohibited from owning cryptocurrencies or crypto-related financial products, such as ETFs or shares in blockchain companies. These restrictions were tightened in 2022 following controversy over insider trading during the early COVID-19 response.
Bowman argued that such limits could hinder the Fed’s ability to attract tech-savvy talent and may prevent existing staff from developing the necessary expertise to regulate evolving financial technologies effectively.
Encouraging Innovation Over Caution
Bowman also urged U.S. regulators not to remain passive in the face of innovation, criticizing what she called an “overly cautious mindset” in financial oversight. She warned that dismissing blockchain and digital assets could cause traditional banking to fall behind.
“We must choose whether to embrace the change… or to stand still and allow new technology to bypass the system,” she said.
Policy Shift Under Trump Administration
While Bowman did not propose specific asset types or limits, her remarks align with the broader pro-crypto shift seen during the Trump administration. Recently, the Fed announced it would end a supervision program focused on crypto activities in banks, and Trump signed an executive order directing regulators to investigate crypto-related de-banking concerns.
